UPDATE 3-U.S. natgas futures end lower for 5th straight loss
* Extended forecasts for mild weather pressure prices * Front futures down nearly 9 pct in last five sessions * Near record-high storage, production also weigh * Coming Up: EIA, Enerdata natgas storage data on Thursday By Joe Silha NEW YORK, Dec 12 (Reuters) - U.S. natural gas futures closed lower for a fifth straight session on Wednesday as comfortable supplies and forecasts for relatively mild weather through next week drove the front-month contract to another six-week low. While technical traders said the market was oversold and due for a bounce after its recent slide, particularly ahead of a weekly inventory report on Thursday, few expected much upside with gas fundamentals still favoring the bears. "Warmer than normal temperatures are continuing to send more and more bulls to the sidelines. None of the normal price drivers for natural gas are overly supportive for higher prices," Energy Management Institute's Dominick Chirichella said in a report. With no extreme cold on the horizon, most traders agreed gas prices were likely to remain on the defensive, with inventories still near record highs for this time of year and production flowing at or near an all-time peak. Traders and analysts were waiting for the next U.S. Energy Information Administration storage report on Thursday, with most expecting inventories to have fallen by just 4 billion cubic feet last week, according to a Reuters poll. A draw at the Reuters poll estimate would be viewed as bearish, coming in well below last year's drop of 79 bcf and the five-year average decline for that week of 113 bcf. Front-month gas futures on the New York Mercantile Exchange ended down 3 cents at $3.382 per million British thermal units after sinking early to $3.366, its lowest since late October. The front contract, which hit a 13-month high of $3.933 about three weeks ago, has lost nearly 9 percent in the last five sessions, its second biggest five-day slide in 12 weeks. AccuWeather.com expects temperatures in the Northeast and Midwest, key gas consuming regions, to average above normal for the next week or so, then cool to below normal just before the Christmas holiday as daytime highs drop into the high 20s and low 30s Fahrenheit. BEARISH INVENTORY REPORTS AHEAD EIA storage data last week showed gas inventories for the week ended Nov. 30 fell 73 bcf to 3.804 trillion cubic feet. While storage last week fell below year-ago levels for the first time in 13 months, traders noted that total stocks were still 168 bcf, or 5 percent, above the five-year average, a comfortable cushion to meet any spikes in winter demand or unexpected disruptions in supply. A huge inventory surplus to last year, which peaked in April at nearly 900 bcf, has been wiped out, but storage is expected to climb back above year-ago in Thursday's EIA report. Stocks hit a record high of 3.929 tcf in early November, making this the fourth straight year in which gas inventories have headed into the heating season at a record peak. RIGS DECLINE, PRODUCTION STILL NEAR RECORD Baker Hughes Inc data on Friday showed the gas-directed rig count fell by seven last week to 417, just above the 13-1/2 year low of 413 posted four weeks ago. Drilling for natural gas has mostly been in decline for more than a year, with gas rigs down 55 percent since peaking in 2011 at 936 in October. But so far production has shown no significant sign of slowing. In its short-term energy outlook on Tuesday, EIA said it expects gas production in 2013 to rise to a record high for a third straight year, while consumption was expected to drop slightly from 2012 levels.
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